Tax Reform Act of 1986


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Tax Reform Act of 1986

A 1986 law involving a major overhaul of the US tax code.

Tax Reform Act of 1986

Legislation in the United States dictating the reduced marginal tax rates, the number of tax brackets, and the deductions and tax shelters that individuals can have. It also increased corporate tax rates and equalized capital gains tax and income tax rates. It was designed to be revenue neutral; this was accomplished by reducing deductions to offset the lower tax rates. It also changed incentives; for example, it increased the home mortgage interest deduction to encourage home ownership. While proponents hail this Act as a major tax cut, critics maintain that it did little to accomplish its main goal of simplifying the tax code. See also: Economic Recovery Tax Act of 1981.

Tax Reform Act of 1986

Tax legislation that significantly reduced marginal income tax rates for individuals and corporations as well as curtailed many deductions and eliminated numerous preference items. The Act was designed to be revenue-neutral and, in general, it benefited high-income and low-income individuals and corporations that do not spend large amounts of money on long-lived equipment. Although an original goal had been to simplify the tax system, no simplification was evident in the final legislation.
References in periodicals archive ?
Dwyer was the Senator's primary advisor for the Tax Reform Act of 1986.
The Tax Reform Act of 1986, crippled the real estate industry.
Treasury and Congress set about eliminating deductions for borrowing on life insurance policies, and, with the Tax Reform Act of 1986, interest on aggregate loans in excess of $50,000 on any life insured by a policy owned by a business is not deductible.
By contrast, bank holdings of state and local government securities continued to decline as they have since the passage of the Tax Reform Act of 1986, which ended a tax advantage of holding such securities.
It is not outrageous, then, to call for one simple legislative change that will correct the most serious flaw in the Tax Reform Act of 1986, plant a flag for the notion of shared sacrifice and, incidentally, brings us about $20 billion closer to the goal of deficit reduction: raise the top tax rate by, say, 10 percent.
Stevens said the Tax Reform Act of 1986 demonstrated that when the tax benefits associated with real estate ownership are curtailed, the value of real estate declines.
The Tax Reform Act of 1986 substantially lengthened the depreciation life of real estate from 19 years, to 31.
That technique was disallowed by the IRS as a result of the Tax Reform Act of 1986.
While stocks were beginning the most recent spurt in the remarkable 17-year bull market, muni bonds remained mired that year in the turmoil that's dogged them since the Tax Reform Act of 1986 reduced the incentives for tax-sheltered investments.
The deductibility of interest paid by individuals on tax deficiencies has been in dispute ever since the Tax Reform Act of 1986 banned deductions of consumer interest such as that charged on credit cards or auto loans.
His ability to keep his Democratic committee members in line and to strike deals with Republicans in Congress and the White House was critical to enactment of, among other laws, President Reagan's tax cuts in 1981, changes in the Social Security system in 1983, the mammoth Tax Reform Act of 1986 and deficit-reduction packages in 1990 and 1993.
Federal Housing Tax Credits were created by the Tax Reform Act of 1986 to encourage the development of affordable housing.